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May 25, 2007

GOP Presidential Hopefuls on Tax Policy: Mitt Romney

Last week's Republican presidential debate showcased a shockingly uniform "how low can you go" attitude toward taxes -- and a set of leading questions from the Fox News moderators that didn't help matters. Here's Mitt Romney, defending his tax record as governor of Massachusetts:

WENDELL GOLER (Fox News): Gentlemen, we have a series of questions on the economy, the budget, taxes and entitlements. And I have one for each of you, starting with you, Governor Romney.Your critics have called you "flip-flop Mitt" for, among other things, your decision to take the "no new taxes" pledge this year after refusing to do so in 2002. Tell me why your decision to take the pledge shouldn't be seen as a blatant appeal to the party base, sir?MR. ROMNEY: I want to make it very clear that I'm not going to raise taxes. As governor of Massachusetts, I made it very clear there, and I did not raise taxes. We faced a huge budget gap, and I went in and said, you know, what? I know some people want to raise taxes, but that's going to hurt working families and scare away jobs. I recognize that raising taxes could also lead to a slowdown in our economy, and so we didn't do it. We balanced our budget, and that's exactly what I'll do with the federal government.The key thing you have to consider, as you look at what's happening in the federal government, is that Washington is broken. We need to have fundamental change in the way business in Washington is carried out. What that means is we're going to have to have leadership that can reorganize the government. We're going to have about 40 percent of the government employees turn over in the next couple of terms. And if we can -- we can reduce the employment there, but more importantly, is to go through all the agencies, all the departments, all the programs and cut out the unnecessary and the wasteful.We're also going to have to do something we talk about on in Iraq. We all talked about benchmarks. Well, how about benchmarks in Washington? Let's lay out what we're going to get done, and instead of just talking about the same old same old, let's streamline and make Washington more efficient.

And that's all for Mitt. A couple of things are worth noting here.1) Goler's question. The implication of his question is that the "no new taxes" is a lifetime commitment, and that it's impermissible to imagine a fiscal situation in which tax hikes might conceivably be part of the way out. If you took the pledge in '06, stands to reason you must have also taken it in '02-- or else you're a "flip flopper." This sort of reasoning betrays the basic irrationality of the "no new taxes" crowd-- it doesn't matter what the current fiscal situation is. There's always a better solution than tax hikes, he's saying.2) Mitt's answer. He could have said "I knew we were in a tough fiscal spot that year, and I was gonna try my hardest to not raise taxes, but I couldn't guarantee it so I didn't take the pledge." He could, in short, have taken the opportunity to show his understanding of nuance-- of the distinction between really wanting to do something and guaranteeing that it will happen. And he chose not to.3) How stale, how recycled, does his "fraud, waste and abuse" rote response sound: he wants to "go through all the agencies, all the departments, all the programs and cut out the unnecessary and the wasteful." Will every anti-tax office-seeker until the end of time use this as his/her "plan" for balancing the budget?

Goler's question is, in fact, a good one. How to reconcile Romney's behavior as leader of Massachusetts with the harder line he's taking in his Presidential run? Was he tailoring his positions to a moderate demographic in Massachusetts-- or is he tailoring his positions now? And even if the answer is "both," is that obviously a bad thing, or just the sign of an effective politician?

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The subjects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state - Adam Smith, An Inquiry Into The Nature and Causes of the Wealth of Nations, 1776